PROJECT SUMMARY (FAST-TRACK APPLICATION) Alzheimer?s disease (AD) is a neurodegenerative disorder affecting over 5.4 million individuals in the United States alone. Carriers of apolipoprotein (apo) E4, one of the three apoE isoforms (apoE2, apoE3, apoE4), are associated with 60?80% of all AD cases, making apoE4 the major genetic risk factor for AD. As a complex disease that causes early damage to the hippocampus, a brain region essential for cognition, AD presents unique challenges for developing traditional therapies. To date, all efforts to develop therapies that target specific AD-related pathways have failed in human trials of late-stage AD. As a result, an emerging consensus in the field is that treatment of patients with mild or moderate AD with current drugs comes too late, likely due to significant neuronal loss in the brain, especially in the hippocampus. In this regard, induced pluripotent stem cells (iPSCs) provide a way to generate human neurons or their progenitors for cell-replacement therapy. However, currently limited iPSC-based therapeutic approaches under development for potential AD treatment do not consider apoE4?s impact, which could lead to clinical failure due to patient heterogeneity and/or apoE4?s detrimental effects. By using apoE4 allelic expression to stratify patients, we will be able to create a defined patient population (apoE4-positive AD patients) for testing a matched disease-modifying treatment [human iPSC-derived somatostatin (SST)-positive GABAergic interneurons with an apoE3/3 genotype]. This proposal builds on five novel findings from our recent studies in animal models of AD and in human iPSC-derived neurons. First, apoE4 causes SST-GABAergic interneuron loss in the hippocampal hilus, which correlates with the impairment of hippocampal network activity and the extent of learning and memory deficits. Second, apoE4 causes the selective death of human iPSC?derived SST-GABAergic interneurons in culture. Third, the detrimental effect of apoE4 on SST-GABAergic interneurons is cell autonomous. Fourth, transplantation of mouse GABAergic interneuron progenitors into the hippocampal hilus restores normal learning and memory in aged apoE4 knock-in (apoE4-KI) mice without or with A? accumulation. Fifth, transplantation of human iPSC- derived GABAergic interneuron progenitors into the hippocampal hilus restores normal learning and memory in aged apoE4-KI mice. The goals of this proposal are 1) to develop and optimize a protocol for the robust derivation of SST-GABAergic interneurons from human iPSCs with an apoE3/3 genotype, 2) to determine the desired dose and test the safety and efficacy of transplanting human iPSC-derived SST-GABAergic interneurons into the hippocampal hilus to restore normal learning and memory in aged apoE4-KI mice, and 3) to test the safety and efficacy of transplanting human iPSC-derived SST-GABAergic interneurons into the hippocampal hilus to restore normal learning and memory in apoE4-KI mice expressing human amyloid precursor protein (APP) with mutations that cause familial AD (FAD) (hAPPFAD).